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Get In Touch

By submitting an enquiry through 'get in touch' your data will only be used to contact you regarding your enquiry.
If you would like to receive newsletters from Thomson Snell & Passmore please use the separate form below.

I agree to be 'opted in' to receive the Thomson Snell & Passmore communications I have selected above. I understand that this means they will send me relevant content based on the options I have selected. \n\n If you do not wish to receive promotional material from Thomson Snell & Passmore please contact us using the following link: info@ts-p.co.uk

Contractual Variation

It is common for commercial agreements to contain clauses which require amendments to the terms agreed to be effected in writing. These “anti-oral variation” clauses are said to aid commercial certainty. A recent Court of Appeal decision has however curtailed the effectiveness of such clauses.

The subject dispute arose out of an exclusive supply agreement for component parts in the car industry. The relevant contract contained an “anti-oral variation” clause in the following terms:

“Entire Agreement; Amendment: This Agreement, which includes the Appendices hereto, is the only agreement between the Parties relating to the subject matter hereof. It can only be amended by a written document which (i) specifically refers to the provision of this Agreement to be amended and (ii) is signed by both Parties.”

The Court of Appeal confirmed that if both parties agree to vary the contract orally then that will be effective notwithstanding contractual provisions such as this which expressly prevent variation undertaken in this way.

It is a fundamental principle of English law that parties to a commercial contract subject to English law have a largely unfettered freedom to agree whatever terms they choose to undertake, and can do so in a document, by word of mouth, or by conduct.

Parties can, as in this case, agree to a clause restricting variation of the terms originally agreed to writing.

However, if they can agree to a clause restricting variation to writing then they can also subsequently change their minds and agree to dispense with a clause restricting variation to writing only.

The consequence is that in principle the fact that the parties’ contract contains a “no oral variation clause” will not bind the parties if they both subsequently expressly agree to vary their contract in the manner the original restriction was designed to prevent.

From an evidential point of view varying an “anti-oral variation” clause orally or by conduct will be difficult to demonstrate in most cases without clear evidence that this was intended by both parties.

Notwithstanding this decision, putting any agreed variations in writing remains the best way of preventing disputes later arising.

Our team of experienced and highly specialist lawyers includes experts in contractual, commercial and international disputes, insolvency, shareholders’, directors and partnership disputes, in disputes arising from construction/engineering projects and we also act for clients seeking to protect or defend intellectual property/IT rights.

We can deal with all the stages of a commercial contract – from initial structuring and head of terms to preparing, negotiating and completing the contract documentation. We can also advise you on contractual disputes that may arise during a project and provide assistance with terminating a business relationship.

We regularly advise both employers and senior employees on service agreements. We will advise you on the proposed terms and on any issues that have not been considered. Having a suitable agreement in place from the start will minimise the risk of disputes arising later on.

Get In Touch

By submitting an enquiry through 'get in touch' your data will only be used to contact you regarding your enquiry.
If you would like to receive newsletters from Thomson Snell & Passmore please use the separate form below.

I agree to be 'opted in' to receive the Thomson Snell & Passmore communications I have selected above. I understand that this means they will send me relevant content based on the options I have selected. \n\n If you do not wish to receive promotional material from Thomson Snell & Passmore please contact us using the following link: info@ts-p.co.uk

I agree to be 'opted in' to receive the Thomson Snell & Passmore communications I have selected above. I understand that this means they will send me relevant content based on the options I have selected. \n\n If you do not wish to receive promotional material from Thomson Snell & Passmore please contact us using the following link: info@ts-p.co.uk